Danish law on taking securities does not permit floating
charges, or similar pledges or mortgages of an undetermined
plurality of assets.
Based on a report by the Danish Commerce and Companies Agency,
the Danish Ministry of Justice has introduced a Bill to the Danish
parliament allowing companies and other business entities to
establish a floating charge. It is anticipated that the Bill will
be passed in the summer session of parliament and become law in
Under the Bill a company or a business entity can grant a
floating charge over all assets that the company owns and will own.
Floating charges will be limited to certain categories of assets
but will include all future assets within those categories and not
prevent or restrict a normal change or renewal of the charged
The chargeable categories of assets are receivables, goods, raw
material, equipment, inventory, livestock and IPR. Not included in
the floating charge are real estate with fixtures and equipment,
ships above five gross tonnages, aircraft, and some other
categories of assets for which Danish law already provides a
specific way of pledging or mortgaging.
A floating charge is established by registering an indemnity
bond with the Danish central registry office. The registration fee
is DKr1,400 ($238) plus 1.5% of the secured amount. The level of
this duty might impact the use of a floating charge in certain
When the floating charge is registered, the assets are secured
and protected against the claims of the company's creditors or
contractual rights to the assets established later - regardless of
whether the later claimant is in good faith or not. This was not
previously the case.
The Bill also creates a form of floating charge that relates
only to taking security over the receivables of the company or
business entity originating from sales of goods and services. The
proposed legislation on floating charge in receivables is identical
to the rules that apply to a general floating charge.
It is not possible to establish a floating charge in favour of a
person or company closely related to the grantor of the security.
In case of insolvency, the floating charge crystallizes so that the
charge will be limited to the assets included at the date of the
bankruptcy notice. Assets acquired afterwards are not covered by
the floating charge.
Rasmus Skovsgaard Haugaard